Pakistan likely to cancel wheat export plans

ISLAMABAD: Pakistan is likely to cancel plans to export two million tons of surplus wheat in the wake of devastating floods, two food ministry officials said on Friday.

A decision not to export would add to weather-related cuts in wheat available to the international market, after Russia earlier banned exports after a drought there slashed output.

“Currently there are no talks of exporting wheat,” one ministry official, who is familiar with the discussions, told Reuters on condition of anonymity. “The plan to export 2 million tons of surplus wheat is likely to be shelved,” he added.

The second official said that the government was closely monitoring the situation and confirmed the likely cancellation of the export plans. Given the devastation of the floods, the government wants to ensure there are no shortages, especially in the flood-affected areas.

Pakistan, Asia’s third largest wheat producer, said in April it would export 2 million tons of wheat after a bumper crop of 23.86 million tons in 2009-10, and a carryover of 4.2 million tons from the previous crop. But it had held back on exports because of low prices in the international market.

The floods have damaged up to 600,000 tons of privately-stored wheat, according to initial estimates, and a food ministry official said on Thursday that another 125,000 tons of wheat in government stores had been washed away.

Wheat is a staple food in Pakistan with about 22 million tons consumed each year. Any shortages or steep price hikes would inflame public anger towards the government, which is facing mounting criticism over its handling of the catastrophe.

Pakistan banned wheat exports in 2007 because of shortages and high domestic prices.

Published in The Express Tribune, August 28^th, 2010.